Page 1
30-Nov-17
1
Copyright © 2016 Pearson Education Ltd. 18-1
Chapter
18
Managing
Retailing,
Wholesaling,
and Logistics
Copyright © 2016 Pearson Education Ltd. 18-2
Learning Objectives
1. What major types of marketing intermediaries occupy
this sector?
2. What major changes are occurring in the modern retail
marketing environment with respect to competitive
market structure and technology?
3. What marketing decisions do marketing intermediaries
make?
4. What does the future hold for private label brands?
5. What are some of the important issues in wholesaling??
6. What are some important issues in logistics?
Page 2
30-Nov-17
2
Copyright © 2016 Pearson Education Ltd. 18-3
Retailing
• Retailing
– All the activities in selling
goods or services directly to
final consumers for personal,
nonbusiness use
• Retailer/retail store
– Any business enterprise
whose sales volume comes
primarily from retailing
Copyright © 2016 Pearson Education Ltd. 18-4
Types of retailers
• Store retailers, nonstore retailers, and
retail organizations
Page 3
30-Nov-17
3
Copyright © 2016 Pearson Education Ltd. 18-5
Types of retailers
• Store retailers:
• Specialty store
• Department store
• Supermarket
• Convenience store
• Drug store
• Discount store
• Extreme value or hard-
discount store
• Off-price retailer
• Superstore
• Catalog showroom
Copyright © 2016 Pearson Education Ltd. 18-6
Types of retailers
• Levels of service for store retailers
Self-service
Self-selection
Limited service
Full service
Page 4
30-Nov-17
4
Copyright © 2016 Pearson Education Ltd. 18-7
Types of retailers
• Nonstore retailing
– Direct marketing
– Direct selling
– Automatic vending
– Buying services
Copyright © 2016 Pearson Education Ltd. 18-8
Types of retailers
• Corporate retailing and franchising
Page 5
30-Nov-17
5
Copyright © 2016 Pearson Education Ltd. 18-9
Corporate Retailing and
Franchising• Franchises are distinguished by three
characteristics:
– The franchisor owns a trade or service mark
and licenses it to franchisees in return for
royalty payments
– The franchisee pays for the right to be part of
the system
– The franchisor provides its franchisees with a
system for doing business
Copyright © 2016 Pearson Education Ltd. 18-10
The Modern Retail Marketing
Environment• Competitive retail market structure
New retail forms and combinations
Growth of giant retailers
Growth of intertype competition
Emergence of fast retailing
Decline of middle-market retailers
Page 6
30-Nov-17
6
Copyright © 2016 Pearson Education Ltd. 18-11
The Modern Retail Marketing
Environment
• Role of technology
– Retailers use
technology for
business operations,
to enhance the
consumer shopping
experience inside the
store, and
Internet/social media
strategies
Copyright © 2016 Pearson Education Ltd. 18-12
Marketing Decisions
• Target market
• Channels
• Product assortment
• Procurement
• Prices
• Services
• Store atmosphere
• Store activities and
experiences
• Communications
• Location
Page 7
30-Nov-17
7
Copyright © 2016 Pearson Education Ltd. 18-13
Product Assortment
• Develop product differentiation
Feature exclusive national brands
Feature private-label merchandise
Feature distinctive-merchandise events
Feature ever-changing merchandise
Feature the latest merchandise first
Offer merchandise-customizing services
Offer a highly targeted assortment
Copyright © 2016 Pearson Education Ltd. 18-14
Services
• Retailers must decide on the services mix
to offer customers:
Prepurchase services
Postpurchase services
Ancillary services
Page 8
30-Nov-17
8
Copyright © 2016 Pearson Education Ltd. 18-15
Location
Central
business
districts
Regional
shopping
centers
Community
shopping
centers
Shopping
strips
Location within
a larger store
Stand-alone
stores
Copyright © 2016 Pearson Education Ltd. 18-16
Private Labels
• A private-label brand is a brand that
retailers and wholesalers develop
– Role of private labels
– Private-label success factors
Page 9
30-Nov-17
9
Copyright © 2016 Pearson Education Ltd. 18-17
Wholesaling
• Wholesaling
includes all the
activities in selling
goods or services
to those who buy
for resale or
business use
Copyright © 2016 Pearson Education Ltd. 18-18
Major wholesaler types
Merchant
wholesalers
Full-service
wholesalers
Limited-
service
wholesalers
Brokers and
agents
Manufacturers’/
retailers’
branches/offices
Specialized
wholesalers
Page 10
30-Nov-17
10
Copyright © 2016 Pearson Education Ltd. 18-19
Wholesaler functions
• Selling and
promoting
• Buying and
assortment building
• Bulk breaking
• Warehousing
• Transportation
• Financing
• Risk bearing
• Market information
• Management
services and
counseling
Copyright © 2016 Pearson Education Ltd. 18-20
Market Logistics
• Supply chain
management (SCM)
• Market logistics
• Integrated logistics
systems (ILS)
• Lean manufacturing
Page 11
30-Nov-17
11
Copyright © 2016 Pearson Education Ltd. 18-21
Market logistics planning
1. Deciding on company’s value
proposition
2. Selecting best channel design
and network strategy
3. Developing operational
excellence
4. Implementing solution
Copyright © 2016 Pearson Education Ltd. 18-22
Market-Logistics Decisions
• Order processing: how should we handle
orders?
• Warehousing: where should we locate our
stock?
• Inventory: how much stock should we
hold?
• Transportation: how should we ship
goods?
Page 12
30-Nov-17
12
Copyright © 2016 Pearson Education Ltd. 18-23
Figure 18.1
Optimal Ordering Quantity
Copyright © 2016 Pearson Education Ltd. 18-24
Transportation
• Containerization
– Piggyback,
fishyback,
trainship, and
airtruck
• Private vs.
contract vs.
common carriers
Page 13
30-Nov-17
13
Copyright © 2016 Pearson Education Ltd. 18-25